First Command Reports: Savings Habit Strongest in Military Families with Financial Advisors

August 3, 2018

FORT WORTH, Texas--(BUSINESS WIRE)--Aug 3, 2018--Career military families who work with a financial advisor are in a stronger net worth position than their do-it-yourself counterparts, reporting more than double the amount of accumulated savings and retirement assets.

First quarter 2018 results of the First Command Financial Behaviors Index® reveal that these middle-class military families (commissioned officers and NCOs in pay grades E-5 and above with household incomes of at least $50,000) report average financial holdings of $241,730. That compares to $102,396 for those without an advisor.

Military families with financial advisors are more likely than their DIY counterparts to own a retirement savings account (67 percent versus 48 percent) and a long-term savings vehicle (60 percent versus 31 percent). They are also putting more dollars into these accounts. They report average monthly investments of:

$880 for retirement savings. That compares to $482 per month for those without an advisor.
$563 for long-term savings. Those without an advisor report $349 per month.

Families without a financial advisor are more likely to own a short-term savings account (63 percent versus 52 percent), but they report saving fewer dollars. Average monthly totals for short-term savings are $362 for do-it-yourselfers versus $596 for families who work with a financial advisor.

Working with a financial advisor also aligns with greater retirement confidence. Seventy percent of those with a financial coach are extremely or very confident in their ability to retire comfortably. That compares to just 29 percent of military families without an advisor.

“Financial readiness levels in career military families are strongest among those who work with a financial coach,” said Scott Spiker, chairman/CEO of First Command Financial Services, Inc. “Those who work with an advisor are out-performing their do-it-yourself counterparts. They are putting away more dollars and amassing more financial assets. Service members with a trusted advisor by their side are well positioned to feel confident today as they work towards financial security for tomorrow.”

Military families with financial advisors are also putting more dollars per month towards paying down debt. They report average long-term debt payments of $1,348 and short-term debt payments of $544. Those without an advisor report average payments of $1,149 and $466, respectively.

The savings and debt repayment trend is set to continue. Military families with a financial advisor are more likely to say they will increase their positive financial behaviors in the months ahead. Fifty-two percent intend to increase their savings. That’s considerably more than the rate reported by those without an advisor (29 percent). Forty percent of those with an advisor expect to bump up their debt payments. In contrast, just 26 percent of those without an advisor expect to put more dollars towards paying down debt.

The mix of positive attitudes, behaviors and intentions during the first quarter resulted in an overall Index score of 154, up five points from the previous quarter. (The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.) The Index score for families who work with a financial advisor is 169. For those without an advisor, the score is 118.

“Financial coaches are making a significant contribution to the lives of career military families,” Spiker said. “This is particularly true today as service members and their families learn their way around the new Blended Retirement System. The BRS represents one of the most significant changes to military benefits in 70 years. By coaching their clients to build strong money behaviors, financial advisors will help families continue to confidently pursue their retirement goals.”

About the First Command Financial Behaviors Index®

Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index ® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. http://www.firstcommand.com/fbi/

About Sentient Decision Science, Inc.

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index ®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.

About First Command

First Command Financial Services and its subsidiaries, including First Command Financial Planning and First Command Bank, coach our Nation’s military families in their pursuit of financial security. Since 1958, First Command Financial Advisors have been shaping positive financial behaviors through face-to-face coaching with hundreds of thousands of client families.

First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member
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), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. , a broker-dealer. Financial planning and investment advisory services are offered by First Command Advisory Services, Inc., an investment adviser. Insurance products and services are offered by First Command Insurance Services, Inc., in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Financial Services, Inc. and its related entities are not affiliated with, authorized to sell or represent on behalf of or otherwise endorsed by any federal employee benefits programs referenced, by the U.S. government, or the U.S. armed forces.